PROCUREMENT
SCOPE
CONTEXT
POLICY
Value for Money
Governance and Probity
PROCUREMENT FRAMEWORK
DEFINITIONS
RELATED POLICIES
APPENDIX 1: RISK-BASED PROCUREMENT
SCOPE
This Policy applies to all staff globally.
CONTEXT
Tourism Australia, as a corporate Commonwealth entity of the Australian Government, is bound by a number of
legislative requirements with regard to procurement under, most notably, the Tourism Australia Act 2004 and the
Public Governance, Performance and Accountability Act 2013. This Policy is designed to satisfy these legal requirements
while enabling Tourism Australia to operate effectively in a commercial context.
For all procurement, Tourism Australia must give effect to the principles outlined in Division 1 of the CPR. For
procurement valued at or greater than A$400,000, Tourism Australia must follow the rules outlined in Division 2 of the
CPR.
At Tourism Australia, procurement is typically initiated once the organisation's Annual Operating Plan (AOP) is approved
by the Minister. All procurement should have a direct link to an approved AOP and should be undertaken in line with
Tourism Australia's Delegations Policy and Instrument.
For guidance, interpretation and training on this Policy, contact the Procurement Team.
POLICY
Tourism Australia is committed to ensuring all procurement activity delivers value for money outcomes, encouraging
competition; ensuring efficient, effective, economical and ethical use of resources and ensuring accountability and
transparency in decision-making. Additionally, all potential suppliers must be given the same opportunities and be
treated equally based on their legal, commercial, technical and financial abilities.
Value for Money
Tourism Australia's approach to procurement involves various processes that support value for money outcomes, for
example: assessing risk, seeking and evaluating alternative solutions, ongoing management of resulting contracts and
appropriate disposal of goods.
To execute its AOP, Tourism Australia necessarily procures goods and services from suppliers and works in collaboration
with partners on jointly-funded projects. We recognise that achievement of Tourism 2020 depends largely on the
performance of our suppliers and partners, which is why we aim to build long-term collaborative relationships with
those that share our values and are capable of helping us achieve our goals. We believe that this approach results in
mutual benefit, inspires innovation and will enable us to make best use of supplier knowledge and expertise. For all
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This document: Procurement Policy
Approved by the Managing Director on: 17 June 2014
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partnership agreements and memorandums of understanding entered into by Tourism Australia, a value for money
assessment is conducted to ensure that the partnership generates the required value for the Australian Government.
At a very minimum, we will:
Encourage competitive and non-discriminatory procurement processes;
Use resources in an efficient, effective, economical and ethical manner consistent with the policies of the
Commonwealth;
Make decisions about procurement in an accountable and transparent manner;
Consider procurement risks; and
Ensure processes are commensurate with the scale and scope of procurement.
Governance and Probity
Procurement activity needs to be conducted ethically to enable Tourism Australia and suppliers/potential suppliers to
deal with each other on the basis of mutual trust and respect. We must not seek to benefit, whether as individuals or
on Tourism Australia's behalf, from practices that are objectionable, dishonest, unethical or unsafe.
Employees involved in procurement must also:
Recognise and deal with any conflicts of interest, including perceived conflicts of interest;
Deal with potential suppliers even-handedly;
Not compromise the Australian Government's standing by accepting inappropriate gifts or hospitality;
Be scrupulous in their use of public property;
Comply with the Australian Privacy Principles of the Privacy Act 1988;
Maintain sufficient documentation for every procurement (to ensure Tourism Australia has captured the reasons
for the procurement, the process that was followed and all relevant decisions, including approvals and
authorisations, and the basis of those decisions);
Ensure documentation describes the requirement for the procurement, the process that was followed and how
value for money was considered and achieved; and
Seek the relevant approvals of contracts resulting from procurement in accordance with Tourism Australias
Delegations Policy and Instrument.
PROCUREMENT FRAMEWORK
The procurement framework is comprised of this Policy as well as supporting procedures, guidelines, tools and
templates referred to throughout this document and available from the intranet. The framework is designed to support
value for money outcomes with the following guiding concepts in mind:
1.
2.
3.
Risk-based procurement;
Strategic sourcing; and
Category management.
The core principles of these concepts are set out below. The procedures, guidelines, tools and templates supporting
this Policy describe how they should be practically applied when undertaking procurement.
1. Risk-Based Procurement
To ensure procurement processes are cost effective for both Tourism Australia and potential suppliers, they should be
commensurate with the value and risk associated with the goods or services being procured.
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How Tourism Australia manages procurement can have impacts upon its financial position and its reputation; both of
which are essential to Tourism Australia's long-term viability. Accordingly, the risk associated with a procurement
activity will influence the process that is followed.
As a very basic example, procurement of stationery is likely to be low-risk and low-value so a simple but appropriate
procurement process should be used. By contrast, procurement of a new electronic financial system or digital creative
services provider is likely to be high-risk and high value so the process used should be more rigorous in light of the
associated complexities. This approach is detailed at Appendix 1 and is consistent with Tourism Australia's overarching
Risk Management Policy and Procedure.
2. Strategic Sourcing
Strategic sourcing is a data-driven, analysis-rich methodology for developing sourcing solutions and managing the
market engagement, negotiation and contracting stages of the procurement process. It is ideal for managing largescale, medium to long-term procurement activities, and is based on the premise that optimal value for money can be
best achieved by developing a detailed knowledge of consumption behaviour, the category being sourced and the
supply base, before conducting tendering processes. This knowledge can then be applied to develop targeted sourcing
solutions and market engagement strategies that are harmonised with the value drivers of both buyers and suppliers.
Cost savings derived from strategic sourcing and vendor negotiations can only be realised if there is proactive
continuous improvement practices for identifying and implementing initiatives to reduce cost and complexity and
improve productivity and buyer amenity.
3. Category Management
Category management refers to the practice of segmenting main areas of organisational spend on bought-in goods and
services into discrete groups of products and services according to the function of those goods or services and, most
importantly, to mirror how individual marketplaces are organised. Using this segmentation model, organisations work
cross functionally on individual categories, examining the entire category spend, how the organisation uses the goods
or services within the category, the marketplace and individual suppliers
Category management is used to manage changing business conditions via supplier consolidation, supply economics
(leverage volume) and leverage internal resources (people, knowledge, expertise) to minimise supply chain risk, deliver
cost savings, improve quality and service and leverage presence in the marketplace. It expands on traditional contract
management to encompass continuous year-on-year improvement in the benefits of the contract, as well as ensuring
that those contracted benefits are realised. It is focused on the effective management of contracts to ensure that the
negotiated contract benefits are realised, and on driving continuous improvement in contract benefits year on year.
DEFINITIONS
Goods
Every type of right, interest or thing which is legally capable of being owned. This includes, but is
not restricted to, physical goods and real property as well as intangibles such as intellectual
property, contract options and goodwill.
Potential supplier
An entity or person who may respond to an approach to market.
Procurement
Encompasses the whole process of procuring goods and services. It begins when a need has been
identified and a decision has been made on the procurement requirement. Procurement
continues through the process of risk assessment, seeking and evaluating alternative solutions, the
awarding of a contract, delivery of and payment of the goods and services and, where relevant,
ongoing contract management and consideration of disposal of goods.
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Services
In the Tourism Australia context, services refer to tasks performed by individuals or entities not
payed through Tourism Australia's payroll.
Supplier
An entity or person who has entered into a contract with the Commonwealth. In the Tourism
Australia context, suppliers include all organisations that we source goods and/or services from, as
well as those we enter into sponsorship and partnership agreements with.
RELATED POLICIES
Delegations Policy and Instrument
MPA and Related Contracting Policy
Corporate Credit Cards Policy
Risk Management Policy
APPENDIX 1: RISK-BASED PROCUREMENT
A detailed step-by-step procedure is available on the intranet expanding on the key principles outlined in this Policy.
Key Elements of Risk-Based Procurement
Each procurement needs to be assessed for associated risk to determine the most appropriate process to be followed;
the only exception to this is for procurement valued at or greater than A$400,000 which is subject to prescriptive
requirements under the CPR.
As part of any procurement there must be some form of contractual arrangement entered into. This does not always
mean a long written contract; it can be a simple order, credit card transaction or cab charge voucher. The following
sections summarise the various processes to be followed, presented in order of scale and complexity, based on risk and
whole-of-life agreement/contract value.
Once a business need requiring external resources to deliver is documented in an approved AOP, you will need to
assess where on the following scale of value and risk the good or service falls (the more detailed matrix on the intranet
should be used when undertaking the actual assessment; the scale below is for illustrative purposes only).
WOL Amount
Low value (Up to A$100,000)
Medium value (A$100,000-A$400,000)
High value (A$400,000+)
Value for money evaluation and
approval using Procurement
Procurement Online High Value RFQ
process
Procurement Online registration
and RFT process
Online
Low Value up to A$100,000
If the goods or services you wish to procure are low risk and low value but do not appear as a sub category in the table
below, you will need to conduct an online value for money evaluation using Procurement Online and accessible on the
intranet. This value for money evaluation will also be required if you are seeking to approach only one supplier to
procure goods or services valued at or greater than A$25,000.
Payment should be made where possible with a corporate credit card if it falls into one of the sub categories in the
below table (column on the right).These sub categories reflect Tourism Australia's Chart of Accounts and have been
flagged as low risk goods and services. Tourism Australia targets transactions of less than A$10,000 for credit cards,
however the exact value permissible will be determined by the individual card holder's delegated limit.
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Category (Function Group)
Sub Category (Function Name)
Catering/hospitality
Catering external and catering in-house
Events management
Equipment hire for functions, marketing aids, display design/stand build
Membership & attendance fees
Attendance and membership fees
Premises
Office maintenance/repairs/cleaning
Research goods and services
Research books/periodicals
Staff recruitment & training
Staff Recruitment and Training Fees
Technology goods and Services
Low value technology goods (cables, etc.)
Travel
Accommodation, airfares, hospitality expenses, taxis/ transportation, parking fees and other
travel expenses; delegate travel, familiarisation visits, International Media Hosting Program
(IMHP)
General office costs
Couriers, minor office equipment/ furniture, printing/ photocopying, stationery
Publications
Printing publications
Medium Value A$100,000-A$400,000
Procurements with a WOL value of A$100,00 or greater, but less than A$400,000, should follow the High Value Request
For Quotes Process (HVRFQP) which requires development of a procurement and evaluation plan, an approach to
market using the HVRFQ Template and a formal supplier evaluation using Procurement Online.
High Value A$400,000+
Procurements with a WOL value of A$400,000 or greater should follow the Tender Process which requires development
of a procurement and evaluation plan, an approach to market using the Tender template and a formal supplier
evaluation using Procurement Online. This also involves publishing an open tender on the AusTender website, the
Australian Governments tender portal.
In Tourism Australias regional offices, tenders are not generally published through AusTender, rather these are
advertised in multiple in-region publications prior to the tender release date. Additionally, all procurements with a WOL
value of A$750,000 or greater requires two separate Board approvals. The first approach to the Board is to seek
approval to approach the market with a tender, whereas the second approach is to recommend a preferred supplier/s
following the conduct of an evaluation process. No commitment is to be given to any supplier before Board approval is
received.
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This document: Procurement Policy
Approved by the Managing Director on: 17 June 2014
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